Rakon turns to first-half profit
Rakon turned to a first-half profit from a loss a year earlier, citing growth across the technology company's key markets, improved margins and lower costs.
The Auckland-based company posted a profit of $908,000, or 0.4 cents per share, in the six months ended Sept. 30, from a loss of $5.7 million, or 2.9 cents, a year earlier. Revenue advanced 5.1 percent to $48.3 million, as operating expenses dropped 5.7 percent to $19.5 million, it said in a statement.
Managing director Brent Robinson said the company, which designs and manufactures advanced frequency control and timing products, had achieved modest revenue growth across all its key market segments of telecommunications, global positioning, and space and defence. While the telecommunications market remained subdued, he said the company had strong sampling for two new product platforms that can lead customer's next generation technology requirements.
"It was pleasing to see both improved margins and a reduction in operating costs, where action had been taken in recent years to improve results," Robinson said.
Rakon generated positive cash flow in the period of $4.9 million, compared with negative cash flow of $600,000 in the year-earlier period, which helped the company reduce net debt to $30,000 from $19.7 million.
First-half underlying earnings before interest, tax, depreciation and amortisation jumped to $3.8 million from $600,000 in the year-earlier period and the company reiterated its forecast for full-year earnings on that measure of between $10.7 million and $12.7 million.
In its largest market of New Zealand, underlying ebitda lifted to $4 million from $292,000 a year earlier, while its Chinese investments boosted earnings to $1.4 million from $809,000.
In the UK, underlying ebitda dropped to $815,000 from $1 million, and in India earnings fell to $371,000 from $531,000.
In France, the underlying ebitda loss narrowed to $1.3 million from $1.6 million, while in Australia the loss widened to $1.3 million from $921,000.
Rakon won't pay a first-half dividend. Its shares last traded at 21.5 cents, having dropped 2.3 percent this year.